Providing Equitable Relief
Oregon is committed to providing equitable relief through the Homeowner Assistance Fund programs. Pursuing an equitable recovery from the coronavirus pandemic is a legal requirement for the program and a policy commitment made by the State of Oregon and Oregon Housing and Community Services.
Pursuant to the American Rescue Plan Act and U.S. Treasury guidance, 60% of assistance funds disbursed must be provided to homeowners at or below 100% of the area median income or 100% of the median income for the United States, whichever is greater. Further, assistance provided to homeowners with incomes above those levels – and up to 150% of the area median income – must be prioritized for socially disadvantaged individuals.
For the Homeowner Assistance Fund, the U.S. Treasury defines socially disadvantaged individuals as:
Those whose ability to purchase or own a home has been impaired due to diminished access to credit on reasonable terms as compared to others in comparable economic circumstances, based on disparities in homeownership rates in the HAF participant’s jurisdiction as documented by the U.S. Census. The impairment must stem from circumstances beyond their control.
Socially disadvantaged individuals include:
- (1) member of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society,
- (2) resident of a majority-minority Census tract,
- (3) individual with limited English proficiency,
- (4) resident of a U.S. territory, Indian reservation, or Hawaiian Home Land, or
- (5) individual who lives in a persistent-poverty county, meaning any county that has had 20% or more of its population living in poverty over the past 30 years as measured by the three most recent decennial censuses.
In addition to federal requirements, Governor Kate Brown directed “every state agency … [to] apply the State of Oregon Equity Framework” in planning for an equitable recovery. Oregon Housing and Community Services is following this framework by attempting to consider and prioritize equity, address racial disparities, address systematic wealth inequalities, and provide infrastructure for underserved communities to return to stable and affordable homeownership. Among other categories, the minority communities named in the governor’s recovery framework may be based upon race, ethnicity, citizenship status, language, disabilities, sexual orientation, age, economic status, or rural residency.
Preventing foreclosures and displacement also aligns with the agency’s mission to provide stable and affordable housing so that Oregonians may live free from poverty and pursue prosperity. The Homeowner Assistance Fund programs will further Oregon’s Statewide Housing Plan goals and the explicit priorities for equity and racial justice, homeownership, and rural communities. Beyond the legal requirements, promoting an equitable recovery for low- and moderate-income Oregon homeowners is a mission opportunity that we hope the Oregon Homeowner Assistance Fund will help achieve.
Importance of an Equitable Recovery
The economic implications of the coronavirus pandemic have reached far and wide. When President Joe Biden signed into law the American Rescue Plan Act, setting aside funds for the Homeowner Assistance Fund, 628 Oregon homeowners (0.11% of all Oregon homeowners) were in foreclosure and 14,225 (2.49%) were 90+ days delinquent on their mortgages. Based on available data from multiple sources, stakeholder engagement, and public participation, Oregon Housing and Community Services developed a needs analysis for Oregon homeowners, which served as the basis for decisions made developing Oregon’s Homeowner Assistance Fund programs.
Most Oregon homeowners have incomes above 100% of area median family income, including 69% of Asian homeowners and 64% of white homeowners. However, only 53% of Black or African American, 58% of American Indian or Alaska Native, and 52% of Latino/a/x homeowners are above 100% area median income. In many locations, the disparities increase. In Multnomah County, 44% of Black or African American homeowners earn less than 80% of the area median income. Homeowners of color are more likely to be employed in the service industry, which is known for low wages and major job losses during the pandemic. Nationally, 17% of Black homeowners, 16% of Latino/a/x homeowners, and 16% of Asian homeowners fell behind on their mortgages due to lost income. Low-income homeowners, particularly those of color, are more likely to be in arrears and to have fewer resources to pay off those arrears.
Low-income homeowners are also more likely to be cost-burdened, meaning their housing costs take up a larger proportion of their gross income. For example, a household with $1,000/month in housing costs and $2,000/month in income has a 50% cost burden while a household with $4,000/month in income has a 25% cost burden. Cost-burdened homeowners have fewer funds available to endure and recover from a financial crisis, and fewer opportunities to qualify for a viable payment plan or modification to cure their arrears. Cost-burden data also reveals a racial disparity: all racial groups are similarly cost-burdened at various income levels, except for Black and Latino/a/x homeowners, who have higher cost burdens.
Oregon plans to prioritize homeowners in four categories: homeowners most at risk of foreclosure, low-income households (100% AMI and below), socially disadvantaged individuals, and rural households. In addition, Oregon Housing and Community Services plans to fast track – within the context of these other prioritizations – homeowners who have been doubly impacted by COVID-19 and displacement due to natural disasters. These are not additional eligibility criteria; they are prioritizations of applications within the program.
Homeowners Most at Risk of Foreclosure
Oregon recognizes it will not be able to provide all eligible homeowners with HAF assistance. We interpret foreclosure and displacement avoidance to be the top priority of the American Rescue Plan Act and the U.S. Treasury guidance. This interpretation is in line with the agency’s mission and values, the Statewide Housing Plan, and Oregon’s recovery framework. We believe that homeowners in or approaching foreclosure have most likely exhausted their other options. Therefore, the agency will implement its Homeowner Assistance Fund programs using foreclosure and displacement avoidance as the top priority.
Oregon Housing and Community Services will solicit foreclosure status on every application, including requesting a sale date if a homeowner is in foreclosure. This flag will give top priority to those homeowners within the application process. These borrowers should contact and work with both housing counselors and legal aid attorneys by county to help avoid foreclosure.
According to Treasury guidance, 60% of the funding made available to the state must assist homeowners with incomes equal to or less than 100% AMI. Oregon plans to fulfill this requirement by restricting eligibility in its Ongoing Payment Relief program to households at or below 100% AMI. In addition, Oregon will prioritize homeowners at or below 100% AMI in its Past-Due Payment Relief program.
Socially Disadvantaged Individuals
Based on Treasury guidance and Oregon homeowner needs analysis, socially disadvantaged individuals will be prioritized for applications at income levels above 100% AMI. The agency is establishing methods of identifying homeowners who are likely socially disadvantaged individuals based upon geography, loan type, or self-identification.
Treasury guidance calls out the unique needs of rural homeowners several times. Repeated in both Oregon’s research data and stakeholder engagement, rural homeowners often have higher living expenses and lower housing stock, especially for affordable housing. They have fewer options to purchase and develop property. In addition, displacement can be more severe in a rural community, forcing a family to move to a nearby town or county.
Homeowners Displaced by Natural Disasters
Over the past few years, Oregon has seen natural disasters impact its residents, including many homeowners living in affordable and/or manufactured housing. Oregon experienced massive flooding in the Umatilla area and devastating wildfires across the state, highlighted by the wildfires of Labor Day 2020. Both occurred after Treasury’s coronavirus hardship date of January 21, 2020. Some families were displaced from their homes due to these events while also experiencing financial hardship as a result of the coronavirus pandemic. Oregon Housing and Community Services wants to prioritize these homeowners who have been doubly affected by fast tracking their applications within the other parameters set forth above.
Oregon’s Phased Opening (Phases 1-3 open now)
Oregon’s Homeowner Assistance Fund is opening in phases to focus efforts on homeowners who are most at risk of foreclosure and displacement and who are traditionally underserved and need additional time or accommodations to apply. This focused and phased opening also allows the agency to be flexible and responsive to changing needs.
Eligible homeowners may only apply during the phase that applies to their situation. If an application is submitted during an incorrect phase, it will be withdrawn and the homeowner will need to reapply during the correct phase. This is to ensure the application has up-to-date information when it is processed.
For more information about phases and when you may apply, see How to Apply.